Top 500 managers see assets hit record $119.5 trillion

Assets under management (AuM) at the world’s 500 largest asset managers have reached a new record of $119.5 trillion, according to new research from Willis Towers Watson’s Thinking Ahead Institute. As of the end of 2020, this represents an increase of 14.5% on the previous year when total AuM was previously $104.4 trillion.

The research confirms growing concentration among the top 20 managers whose market share increased during the period to 44% of total assets.

Of the top 500 managers, 221 names that featured on the list a decade ago in 2011 are now absent in 2021, demonstrating a quickening pace of competition, consolidation and rebranding.

Blackrock has retained its position as the largest asset manager in the ranking, followed by Vanguard holding its second-place position for the seventh consecutive year. Of the top 20, 14 are U.S. managers, accounting for 78.6% of the top 20 AUM. On the whole, passive investments represent 26%, an increase of 16.2% compared with a 15.4% growth in actively managed AuM.

Asset managers have also been addressing the growing demand from more sophisticated asset owners for more complex and tailored investment solutions. Outsourced chief investment officers, a total portfolio approach and exchange-traded funds (ETFs) have all been popular sources of growth for the world’s top managers, to meet clients’ increasing requirements for returns.

“We have witnessed unprecedented change within the investment industry — accelerated dramatically by the pandemic,” said Roger Urwin, co-founder of the Thinking Ahead Institute. “In particular, sustainability is no longer just a luxury for some firms. Instead, during the pandemic, asset managers from all corners of the world have become even more aware of the interconnectedness of the financial system with society and the environment.”

According to the research, passively managed AuM among the largest firms grew to a total of $8.3 trillion in 2020, up from $4.8 trillion in 2016.

“Asset managers have always had the ambition to develop and innovate. We have seen this particularly with ESG [environmental, social and governance] mandates, which increased by 40% in 2020. The biggest contributor to this was the growth in ESG ETFs,” said Urwin.

Additional research findings:*

• Half of managers surveyed (50%) increased the proportion of minorities and women in top positions over the course of the past year.
• Client interest in sustainable investing increased across 91% of the firms surveyed.
• 78% of managers increased resources deployed to technology and big data, and 66% increased resources deployed to cybersecurity.
• The number of product offerings increased for more than two-thirds (70%) of surveyed firms.
• Aggregate investment management fee levels decreased for a quarter (25%) of the surveyed managers — but fee levels increased for 21% of managers.
• A majority of managers (59%) experienced an increase in the level of regulatory oversight.

*Excludes US-based asset managers

The world’s largest money managers